Market Update December 18th, 2023

Last Thursday marked a significant point for the average top-tier 30-year fixed mortgage rate, teetering on the brink of a seven-month low. This distinction, while noteworthy, is a matter of fine detail. Since then, the rates have exhibited only a marginal increase, so slight that it's more apt to view the rates from Friday and today as a horizontal continuation of last Thursday's low.

Currently, the average lender is offering a 30-year fixed rate just below 6.7%. This rate, barring the past two days, sets a record as the lowest in seven months. This stability in rates is mirrored by a lack of significant activity in the underlying bond market, with Treasury yields also showing little variation since last Thursday. Financial markets are now in a holding pattern, anticipating the next major economic data release in the first week of January. This upcoming data, primarily consisting of the jobs report and the Consumer Price Index, is considered 'top tier' in today's financial landscape.

It's important to note that this doesn't imply a complete absence of volatility in mortgage rates in the interim. Unforeseen fluctuations could still occur, but it would likely require unexpected changes in the economic data to see rate movements exceeding a range of 0.15% to 0.20% in the next two weeks. The current stability, therefore, hinges on the consistency of economic indicators.

In summary, mortgage rates are experiencing a period of relative calm, hovering just below the seven-month low threshold. The coming weeks, leading up to the release of key economic reports in early January, are expected to maintain this trend barring any major surprises in economic data. This period serves as a crucial observation window for both lenders and borrowers, keeping an eye on potential shifts that could influence mortgage rates.

Keep eyes on rates as supply seems to be holding steady the last couple of months with a slight dip this last week. This rate of movement could cause some energy after the holiday season when everyone gets back on their normal schedules.

“Inspiration does exist, but it must find you working.”
—Pablo Picasso

Have a great week everyone!